“We don’t want Superpowers in our Backyard”, says Sri Lanka’s Foreign Minister, as the country faces criticism over “draconian” Internet Laws.

“We don’t want superpowers in our backyards […] We’ve burnt our fingers many times”, says the Foreign Minister of Sri Lanka at an event in Cambridge University.

Back home in Colombo, his government has approved controversial Internet Laws, which human rights organisations have condemned as “draconian” and repressive– potentially seriously threatening the right of freedom of expression in the run up to domestic parliamentary and presidential elections this year. 

As the United States expressed concerns over the potential impact of Internet Legislation– with US ambassador Julia Cheng expressing that the country should “prioritise transparency and ensure transparency does not stifle the voice of its people”, the Foreign Minister was defiant.

“Our voters need to be educated”, he maintained.

Speaking to a forum event hosted in St John’s College, Cambridge by policy think tank  The Wilberforce Society (24/01), Ali Sabry MP – Sri Lanka’s Minister for Foreign Affairs and previously Minister for Finance–  criticised the “double standard” in funding that the International Monetary Fund (IMF) provided to Sri Lanka compared to Ukraine, as the country faces wider scrutiny over repressive Internet Laws.  

The Foreign Minister explained the country has faced recent economic hardship, due to the ongoing conflict in Ukraine and particularly pronounced post-COVID economic hardships due to the nation’s dependence on foreign tourism and remittances. Despite this, the country has faced far more stringent aid requirements from aid bodies, in particular the IMF, compared to war-stricken European nations like Ukraine, Sabry suggested. 

“We need aid conditions linked directly to economics, not geopolitics. Aid is often dependent on taking a side.” The Foreign Minister implied that geopolitical factors, rather than strictly economic concerns, may underlie the conditions for aid. 

“The ADB [Asian Development Bank] and the World Bank have been much more forthcoming” than the IMF, said Sabry. Sri Lanka has been “subjected to aggressive IMF reforms”. There’s a “double standard” compared to Ukraine. “We need predictable standards”. 

“Democracy is the best form of governance until we find something better”

“Unless you have a steady revenue path, you are going to fail”, argued Sabry.  “75 years since independence”, Sabry asserted that “Democracy has created a temptation to exploit societal differences for electoral gains” and an increase in “populist policies” within Sri Lanka. It is the “best form of governance, until we find something better”. 

“I’m a trained lawyer. And in a period of time where no one wanted to take the coveted position of Finance Minister, I took on that responsibility”.

Sabry only served as Finance Minister for a single day, tendering his resignation just twenty-four hours after being sworn in. 

He argued that “economic literacy is a long-way down” in Sri Lanka, with an electorate all too concerned with ‘short-term gains’”– though he believes “welfare and literacy are high”. 

“If you cut taxes, how are you going to balance the books? […] You can’t cut revenue and increase expenditure […] People should question such policies– how can you ensure proper schooling without a huge tax burden”.

“People felt the hunger and the need to get into the streets”. The 2022 coup led “many Sri Lankans to say that ‘We don’t want politicians!’ But without politicians, who is going to bring about reform?”.  

Sabry asserted that Sri Lanka’s “institutions are strong […] seventy-five years from Independence”.

 “We uphold the separation of power and our judiciary holds up our constitution which requires politicians to exist”, he reiterated– sharing a similar sentiment in his address to the Cambridge Union this week.

There’s no “Chinese Debt Trap” in Sri Lanka 

“Our foreign policy is independent and non-aligned: we don’t take good will for granted”. 

Despite admitting that his country “burnt our own reserves”, the Foreign Minister of Sri Lanka declared that “we have burnt our fingers many times”. 

Sabry denounced accusations of a “Chinese Debt Trap” in Sri Lanka. The country’s growing financial co-dependence on China, and its increasing debt towards Chinese investors, has been criticised by Western critics as a covert mechanism of Chinese influence in South Asia. 

Instead, he criticised the “geopolitical conditions … linked to” international aid and investment. The Foreign Minister of Sri Lanka criticised the International Monetary Fund’s “double standard”, in his talk about “accessibility for development finance for emerging economies”. While the country has had to jump many hurdles to secure aid from the IMF, he points out the comparative ease with which aid has been secured for Ukraine. 

“The Chinese have been an important source of investment”, Sabry said– rejecting the characterisation of his country as a “victim” of China. Sabry met with Chinese Foreign Minister, Qin Gang, in October 2023 where he said that China is a “great friend and an important development partner”. He also highlighted that China supported the improvement of the country’s economy after a long conflict with Tamil separatists ended in 2009– “bilateral relations, including with the Chinese, are important”. 

“COVID crushed us, as did the War in Ukraine”. The country has historically been “heavily reliant on foreign currency through tourists and remittances”, which all “dropped during the pandemic”. 

Sri Lanka was the first Asia-Pacific country in two decades to default on foreign debt of $41 billion in 2022. Since then, the country has become increasingly dependent on Chinese Foreign Investment. In October 2023, the country reached a preliminary debt restructuring agreement with China, covering around $4.2 billion of its debt. He also acknowledged that “India played a role”, extending a line of credit in 2023. 

“Sri Lanka was economically unsustainable, creating an inevitable crisis”, he continued. The country’s economic implosion in 2022, which caused ensuing mass protests that toppled the incumbent government of Gotabaya Rajapaksa (who Sabry supported for election), were caused by a severe shortage of foreign reserves that left the country unable to import vital goods to its people, including fuel. 

“Cooking gas was not available for a month or so”, Sabry said. “Our reserves came down to next to nothing. We burnt our reserves in an attempt to protect the rupee and ran out of foreign currency”.

“No one was willing to lend any longer. I questioned whether we should approach the IMF– we had approached them fourteen times previously. We needed the IMF’s confidence that we were in control of our country’s economic situation”. 

“Aid does not cause corruption”

“Investment is important”, but Sabry disagreed that a continued reliance on aid “would be damaging for Sri Lanka in the long-run”, or could “fester corruption” in the country. Although he recognised the benefits of other private policy solutions, like microfinance, “the purpose of funding is to create a steady revenue stream” and “absorb shocks”

Sabry highlighted the challenges of the “LIC [low-income country] to MIC [middle income country] transition”, which can often cause a reduction in aid that is detrimental to emerging economies– suggesting that Bangladesh was trying to prolong its LIC status for another five years than it technically needed. 

“Cost effective pricing is important. Politicians are not going to pay out of pocket. Instead, subsidies come at the cost of ordinary people– 85% of revenue comes from Indirect Taxes”. 

“Sri Lanka needs to leverage its location as a seaport and hub for transport”. Sabry expressed his support for “tax holidays for Colombo ports”. 

David Cameron recently supported Sabry’s plans before returning to office as Foreign Minister, flying out to the Middle East in September to speak at two investment events for Colombo Port City, having visited the waterside site in-person earlier in 2023. 

Former Tory party leader, Ian Duncan Smith, criticised Cameron and the plans for the Colombo port. 

“Cameron of all people must realise that China’s Belt and Road is not about help and support and development, it’s ultimately about gaining control — as they’ve already demonstrated in Sri Lanka,” said Duncan Smith earlier this year.